you are the ambassador of planet cute. if it passes your cute test, it's officially cute. thank you for watching. that's it for "the five." thank you for watching. see you tomorrow. >> bret: no visible movement on the sequester. the two sides can't agree on much, including who is responsible for fixing it. some lawmakers on both sides, though, are now asking does it need fixing? this is "special report." ♪ ♪ >> bret: good evening. i'm bret baier. finger pointing over the cuts and the rate of spending growth is reaching an art form in washington tonight. amid the p.r. of posturing and what is the ultimate game of political chicken. you are heard the name

sequester. tonight on this show, we will show you how it gets implemented. and what it means for the big picture budget wise and politically. ed henry has the top story tonight. >> the effect of the sequester would be severe and it would go to the miles per hour families. >> day two of the white house pushing the line, president obama started yesterday about how automatic cuts will knock hundreds of thousands of people out of their jobs among other calamities. >> tens of thousands of parents will have to scramble to find child care for their kids. >> today, pentagon officials said furloughs among their civilian employees would not start until late april. as for daycare -- >> how do you back up tens of thousands of parents will search for child care immediately >> look, whether that search begins on march 1 or in the near future, the impact on the economy and on people's lives is real. >> indeed, defense officials

also said today especially if it did not start right away, not only will the jobs be furloughed, all civilian pay will be cut by 20%. one reason white house aides say they have the upper hand over speaker john boehner and the conservatives seem to agree. boehner had an op-ed blasting the president for not coming up with a solution. the republican declared the cuts will be deep writing a week from now, a dramatic new federal policy is set to go in to effect that threatens the u.s. national security. thousands of jobs and more. conservative journalist byron york responding to the op-ed noting that boehner has uncomfortable position. adding why would boehner adopt the democratic description of the cut as deep when it affects small part of the federal spending? democrats are having their own problems coordinating their message, as the white house tries to push back on this probably attack.

>> it was his proposal. i thought it was a bad idea. the president got it and he signed in law. he didn't have to sign it in to law. for a year, from august 2011 through the end of last year, the president did nothing to stop it. >> democrat max baucus chair of the senate finance committee told a local station back home the president bears some responsibility to fix this. >> the white house recommended it frankly. back if august of 2011. so now we are feeling the effects of it. i don't want to say the president solely is to blame. he is not. >> there is no sign of a deal. some officials say it's fait accompli that the cuts will kick in, or a couple weeks before they come together. >> bret: ed henry live on the north lawn. thanks. here is a minority opinion getting traction in d.c. what if the sequester isn't the end of the world? what if it's not a bad thing? chief political correspondent carl cameron looks at that

argument. >> these cuths are not smart, not fair. >> six business days and counting to $85 billion in across-the-board federal spending reduction. defense faces 8% cut. other agencies have to reduce spending 5-6%. part of the $3.6 trillion federal budget for this year alone. the $85 billion sequester cut amount to a tiny slice. only 2.4%. since world war ii, government spending averaged 20% of the annual u.s. economic activity. even after the sequester cuts it is 22.2%. that is 10% higher than the average for the last seven decades. government spending seep in blue is still projected to rise substantially for the next ten years. even if the sequester does occur, spending will continue to grow but only bay fractionmly lower amount. whether or not sequester occur this year, the deficit is still over $845 billion. pushing the debt over $17 trillion. president obama first proposed the sequester and his party are trying to blame the g.o.p.

for dire economic consequences, particularly, to military. but in 2009 he proposed spending for less than the budget should sequester happen. congress will be impacted but not members' salaries. staffers and operating expenses on the hill could be trimmed by $130 million. federal employees face furloughs. half of the 800,000 civilian military workers could be forced to take up to 26 days off. before the original january 1 sequester deadline they agreed to raise taxes $650 billion and find further savings by the new deadline marm 1. thig >> now time to get serious about reducing washington out-of-control spending. >> but the talks are stalled. no jump-shot in sight. it has republicans determined to get serious cutnous and many think the sequester is the only way to do it.

experts say the serious problem is not agency or defense spending. it's medicare, medicaid, social security and healthcare. the sequester has next to no impact on them. >> bret: thanks. more details on the sequester coming up in a bit. housing starts were down 8.5% in january. applications for building permits rose by 2%. wholesale prices were up .2 of a percentage point last month. food prices jumped .7. the dow lost 108 today. the s&p 500 dropped 19. the nasdaq fell 49. the obama administration is said to be considering fines and other trade actions against china for what is portrayed as unrelenting campaign of cyber theft and espionage. but chief national correspondent jim angle reports washington is being careful about what it is saying. >> with the revelations this week of chinese cyber espionage against u.s. government and company, administration officials emerm

to talk about broad program to crack down on cyber spying an announce nod action against the recent chinese intrusion, even as they talk about how danieling such spying could be. >> a trade secret could be worth billions of dollars. they could require companies to lay off employees, close factories and profits to experience decline in the position andnage or go out of business. >> he emphasized no company is safe. >> there are only two categories of companies affected by the trades secret theft. those that know they have been compromised and those that don't know it yet. >> it fell for the state department to talk about the chinese government, though not the most recent revelation. >> protection of the intellectual property and the trade secret remains a serious and highly troubling issue.

>> he said this is a frequent issue with china. >> that is why cyber security and protection of trade secrets are among the main items that we have discussed with the chinese over the years. >> officials held their fire over recent chinese actions. analysts say the trade sanctions could have been taken because china is violating the international trade rules. >> for instance, it might make the argument that cyber espionage be consistent with the international rights. >> they have mo way to punish them but china tells $425 billion of products every year so there is leverage there. any action against china could hurt the u.s. >> paying the high prices. it's harm to feel the u.s. businesses who use chinese imports and input in their own production. strong words haven't had much effect in the 'on china so

american officials and companies are trying to figure out how to stop this from happening in the first place. bret? >> bret: jim, thanks. former illinois democratic congressman jesse jackson junior pleaded guilty to taking campaign funds for personal use. >> not a proud day. i'm sorry i let everybody down. i'm sorry i let everybody down. >> bret:iacson was charged with conspiracy. mail fraud and wire fraud. his wife sandra jackson admitted to filing false tax returns. both face prison time, fine and forfeiture. who are the most liberal and conservative senators? that is in the grapevine. up next, to frac or not to frac? that is the question. a lot of dollars are riting on the answer. [ fishing rod castin, marching band playing ] [ male announcer ] the rhythm of life. [ whistle blowing ] where do you hear that beat? campbell's healthy request soup lets you hear it... in your heart. [ basketball bouncing ] heart healthy.

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>> bret: gasoline jumped another two cents a gallon overnight. the national average is $3.77. that is up 15 cents from a week ago. crude oil futures lost almost $2 to close at $95.22 a barrel. despite fluctuating new mexico cost there is still much -- fluctuating much debate whether to expand fossil fuels in the country. tonight, john roberts looks at two communities sharing a common border but holding vastly different views about one energy source. >> like so many small towns across america, tuwanda, pennsylvania, reeling from the drain of the economic life blood manufacturing. that is, until gas companies came calling. >> job growth is phenomenal. business growth is phenomenal. >> 1200 quells have be drilled around the boom town. most in pennsylvania. all the new revenue allowed bradford county to retire the $5 million debt and lower property taxes by 6%. it has been great for

business. at cindy's jewelry store. selling pendants and rip only a roughneck could love. >> don't worry about retirement as we did before. vacations are better every year. >> slowdown in fracking because of the rock gas prices. >> it goes through, it ebbs and flows. if a person wants a job, they a job. they can go to work tomorrow morning. >> shale gas drilling is economic game changer for town and vil lanels in the rural pennsylvania that otherwise might have fallen on hard times. while the shale continues northward, underground the economic boom stops right here. >> new york state officials have been bringing their hands over whether to -- wringing their hands whether to lift moratorium over part of the southern tier to drilling. >> a lot of the land has leases already. >> county executive says it's a no-brainer. he is in elmira where unemployment is 9.3% a the

economic indicators in the red. >> i will tell you, we will put people to work and lower unemployment rate an people will be happier than they are now. >> in nearby bingingham hit by hard times, matt ryan, former environmental lawyer wants no part of the fracking boom until it's proven environmentally sound. >> i don't think just because a few people make mup off of this go down a road we can't change. vocal environmental lobby wants new york to ban it out right. autumn says it's not worth the risk. she and her husband grow apples to make hard cider. >> our business relies on water. >> ironically, she has a conventional gas well on her farm. legacy from when her parents opened it. there is no leaks but it's beset with problems. >> if i had an opportunity to -- sorry.

if i had the opportunity to stop my parents from signing the lease on this farm, my god, there is nothing that is worth doing this to your farm. >> three counties over, john has a different take. he runs a diner in bainbridge where the victory shutdowns left the economy depressed. >> younger demonstration here. unfortunately, there is no opportunity for them. >> hit paydirt in gas industry. >> the gas industry is the best opportunity i have ever had. >> payne would love to see the neighbors share the windfall and trust heavy regulation from new york state would prevent issues. in pennsylvania there have been problems. one documented case of widespread water well contamination from a faulty gas well. the traffic and noise that comes from industry in boom times. inconvenience that bradford county leaders say is better than the alternative. >> what would you rather see,

unemployment or traffic line? >> decision new york state will soon have to make. along the pennsylvania-new york border. john roberts, fox news. >> bret: the company behind the controversial keystone xl pipeline says project will have no measurable effect on climate change. that comes days after 35,000 people marched on washington claiming the pipeline would carry dirty oil with 20% more greenhouse gases. transcanada says the oil sands concentrated in alberta represent only one-tenth of a percentage point of groanhouse gas initiatives. two republican senators lament the possible sale to china of a u.s. electric car make they're received american tax dollars. senators thune and grassley say $25 million loan to fisker automotesive another example of the president's ininvestment in a failed experiment. two chinese auto makers are said to be in the running to acquire the struggling company.

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>> bret: we are nine day aceway from the imple mation of the reduction of growth of federal spending. we're calling it the sequester. we are talking about at it lot. as we learn earlier, not everyone thinks it's a bad thing across the board. but let's get some thoughts tonight from a former director of the congressial budget office. thanks for being here. >> my pleasure. >> bret: how does it work? >> sequester is

across-the-board cut. one for defense and up with for nondefense. weapon you get underneath the surface, the federal budget is divided to thousands of different accounts. each account is cut by the same amount. regardless of what is in it. some accounts are payroll. some accounts are conferences, travel, whatever it may be. they get the same cut regardless of what is in there. >> when we say this is a cut, overall, the government is still growing. year over year. so it's still getting bigger. but because this is cutting back and you can't move money around, that is the problem. >> yeah. it's not that the federal government is going to get smaller. it will continue to grow. slowdown in the growth of spending. but you can't shift the money around. so if you are going to try to have priorities, that is out the door. there is no ability to ship mup to high priority projects. low priority takes the cut. everybody gets a cut regardless. >> bret: so let's take for

example the pentagon. >> sure. >> bret: there are what, thousands of buckets? >> buckets. technical term. budget buckets. thousands of them. each with none them. some might be payroll. all people in that one. another might be conferences. that is all travelling to attend professional conferences. they get cut the shame. same. you might move from conference budget to payroll budget so no one is furloughed. you can't do that. we cut it regardless a good or bad idea. >> bret: year over year the budget overall is increasing the pentagon is unable to avoid affecting personnel negatively because they have to cut across the board to those individual buckets. >> absolutely. they have no choice. it seems crazy because it is crazy. if you were doing rational, you know, management of anything you would say what is important, people are important, make sure they get paid and take the cut somewhere else. they don't have the ability to do that. so the people will get

furloughed. >> wasn't congress pass a bill and say well, give transfer authority for sequester so they can move the money around? >> the congress could give every agency transfer authority. it doesn't, because it likes to control where the money is spent. decide how much money get spent. likes to know where it goes. what state does it go to? projects i like or not like. >> bret: the president could call for it, congress could do it tomorrow. >> yes. like many of the other ways to avoid sequester, the president hasn't called for it. no proposals passing the senate. there is mog going op but the sequester. >> bret: so we heard from the d.o.d. that the fu furlough, temporary layoff bus not layoffs. they're just put on hold, furloughs for 22 days over six months. that is saving $4-$5 billion for remaining of the 2013

fiscal year if the sequester goes in place. that is what? >> roughly 8%. this is basically saying take up paid vacation because we don't have money for you. we will have a job for you when we get back. they can space them out and minimize disruption in the workload. they have no flexibility. this is the only way to handle it. >> bret: what do you think of all of this? >> i like to think of the sequester as a bad idea whose time has come. we have to cut spending. we have never gotten spending under control at the federal level. this is not a good way to cut spending. that is not in dispute. absence of someone coming up with a rational proposal to cut places growing rapidly we are stuck with this. the only thing worse than that is doing nothing. >> so if it comes to pass, how bad will the stories be that we see, you know, how the impact of this? to hear it from the president and from all the stories it's like the sky is falling.

>> the stories will be awful. they will say the western hemisphere is coming to an end. the reality will be different. the day after the sequester starts people will get up and go to work. minimal impact. things you hear about the sequester causing recession. it's impossible for that to happen. this is $85 billion. $3.6 trillion budget. come and go with that much notice. $16 trillion. this isn't going to crateer the economy. >> bret: are you optimistic that the cutting process is going to go forward? or are we going to see same crisis to crisis to crisis? >> i am eternal optimist. you have to be optimist to do budget. this is what i do for my career. the budget is always in the red and there are always problems. but it is becoming more and more apparent to everyone we need big programs, medicare, the medicaids, the social securities. on a sound footing, not just for dollars but for beneficiaries that deserve programs that won't collapse under them. that is where the problem is.

not here in pentagon budget. not in the infrastructure budget. >> bret: last thing, this i heard someone the owe day saying this wasn't the bar of peanuts compared to what is on the table. ahe for financial -- ahead for financial possibilities we're facing. that is what you are talking about. next is up the continuing resolution at the end of march. that is another battle. >> that is the bill that funds the government. if they can't come to agreement on that, we start with the government shutdownment we have been through those before. they produce a lot of sound an furry and not much progress on policy front. it would be a great benefit to everyone if we put aside the battles. look at the big problem that everyone knows need to be fixed and fing them. >> bret: thank you. >> thanks. >> bret: it is award season next grape grape. the most conservative and the most liberal member of the u.s. senate. hey, our salads. [ bop ] [ bop ] [ bop ] you can do that all you want, i don't like v8 juice.

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>> bret: now fresh pickings from the political grapevine. national journal named the most conservative and liberal members of the u.s. senate. richard lumenthal, tom udall tied for first of the liberal. dick durbin and al franken and patty murray. the top six conservative members of the senate, james from idaho. john cornyn of texas. now retired jim demint.

the head of the heritage foundation, of course, now. pat toomey of pennsylvania. ron johnson of wisconsin and rand paul of kentucky round out the list. news busters caught double standard of of keystone pipeline protest we told you about early. news hour found 36 words for the march for life, hyping pipeline protest as the biggest climate rally in u.s. history in the segment nine times as long. while the protests were going on focus of the media gaze on the president's golf trip to florida with tiger woods. a pair of texans who are key, oil, gas and keystone pipeline

players. the white house says president obama is committed to the environmental issues and the golf trip had nothing to do with the policy. the u.s. postal service lost more than $40 billion in the last several years, billion with a "b" announced it would stop saturday delivery is getting in the clothing business. they signed a deal with the ohio based clothing company to produce line of apparel dubbed rain, heat and snow. it includes wearable electronics like jackets with ipad controls built in the sleeve. the move will help the bottom line and they say it is about brand awareness and reputatio reputation.

interesting response about president obama's quip about transparency. it's easy to claim the title of most transparent administration in history if you define transparency releasing 100% of the things you want to release. tonight, transparent is in the eye beholder. >> the press wants transparency and the white house wants messaging. conflict ace riss arise. now that lament the lack of access to president obama. >> when it comes to the noose conferences, president obama has given 35 to president bush. president bush held 15 news

conferences in his first term. and they ask every question that journalist asks the president found president obama he is press availability one-third as often as president bush did in the first term. 107 to bush's 335. they notice he likes local events and social media, where hard-hitting questions are seldom if at all asked. >> this is hardly unique to the obama administration, but technology increased administration option to bypass the white house press corps. >> they have chosep transparency up to a point. the distinction is some issues we will explain it but you have to trust us. >> if you look at the new

websites on the internet what information are they using? using stories from a.p., from the new york times or the "washington post"? it all comes back to that. >> even so, the president has not granted interview to "washington post," "wall street journal" or "new york times" in years. bret? >> bret: doug, thank you. >> bret: nasa says it discovered a new plantory system home to the smallest planet discovered. orbiting a star similar to the is up. kefler 37 system is 210 light years from earth. it has no atmosphere and surface temperature of 800-degrees fair white so it cannot -- fahrenheit it can't support life as we know it. moving another day closer to sequester. is that a bad thing? we ask the fox all-stars when we come back. all right that's a fifth-floor problem... ok.

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the president believes it is essential we avoid these cuts. it's bad policy. the speaker himself says it is bad policy. it will go in to effect and those americans will lose jobs because republicans made a choice for that to happen. >> the president's part of the sequester. the white house recommended it, frankly. back in august 2011. now we are feeling the effects of it. the president and speaker put together the deal. >> the president could have stopped it. house of representatives passed one, but two bills that could have stopped it and the senate has done nothing. >> bret: democratic senator max baucus in the middle there. white house probably saying that wasn't helpful in the talking points today. as they are continuing to talk as we are nine days out from the sequester setting in.

as we look at the big picture here, the sequester in the big picture, the budget overall, where the sequester is, $85 billion for this year. 2.4%. we heard from the sequester would likely do. it is still a cut in spending growth. the government would still grow. the heard and president and republicans talk about what could happen. this is a quote from the post about the democrats talking about this. democrats no longer see sequester as sufficient to force republicans to cave op new revenues. rather they increasingly see the looming government shutdown deadline of marm 27 as the real means for them to force a g.o.p. surrender. in other words, ready to fight another day. tucker carlson. a.b. stoddard of the hill.

and syndicated columnist charles krauthammer. a.b., what is your take? >> well, i really hope that experts are right that there is not going to be a considerable hit to consumer demand from the sequester. but i'm not feeling faithful about that. i think that the president 11th hour energy about the sequester is as disingenuous as the republicans' sudden peace to it. republicans have been passing bills to replac replace the sequester. they have been telling us since july of 2011 the sky would fall. $45 billion in defense cuttings go to, are going to be cut out of less that half of defense because so much is protected. it's the way the cuts happen. $800,000 -- 800,000 zil yap

employees received e-mail saying you to look at upward, nearly 20% pay cut. in some families that is going to -- with the two government workers with the domestic and defense spending we are looking at two parents losing considerable pay this year. they will not be going to the beach on the eastern seaboard this summer. they might not go to grandma's in michigan. i hope this is going to go well. if things get tough at shipyard back home and pizzeria closes and barbershop congressmen will hear about this. after the budget fight of march. probably in to late may or early june. then they are going to have a long hot summer. i don't know that we can sit here and say this is fine. republicans are hellbent to let it through. this is a make or break fight. this is going through. there is no plan between marm 1 and 27.

the republicans don't have a plan in the file draw. i think it sounds awful and i hope i'm wrong. >> bret: tucker, as far as the national security issue we are talking civilian issues here. o.m.b. has report on national security issues. the report says the department of defense would shift funds to ensure war fighting and military readiness capabilities were not degrade degraded. saying those thing in other words moving the aircraft carriers would be okay. the sequestration would result in readiness of delay in investment and cutback and equipment repairs, decline and reduction in the base ceremonies for military families.

>> this is not the efficient way to cut government. we are five years past the worst recession of our lif lifetime. government has grown. now businesses paired 2% of the operating busy in five years? mine has, everybody has. to put it in perspective, this is not cataclysmic. politics are clear. the president is not looking for a deal. he is looking for a fight. this is about the 2014 election and belief on the part of that they can win and take back the house. i agree this is inevidentable. we will reach sequestration for sure. >> why is it that the government doesn't say fine, transfer authority. you can do priority. take out conferences. you don't have to go to the conference to do xyz. don't have the child care

problem. have transfer authority for agencies and don't make it an issue. pass a bill tomorrow. >> that is why this is the ridiculously hyped armageddon since the mayan calendar. this look worse tan the mayan disaster. this as you say can be solved in a day or an hour by allowing transfer of funds. this is soluble. the president is the up with who ought to propose it. he won't. he is looking for a fight. not a solution. secondly look at this in perspective. in terms of the gross domestic product of our economy this is .03 of -- this is a third of 1%. on the domestic side, 2.5 cents on the dollar.

this is a penny-and-a-half on the dollar of reduction. a debt of $16 trillion and the argument today is if we cut a penny-and-a-half on nondefense spending in a year it's the end of the world. if so, we are hopelessly in debt or we will end up -- >> bret: i want to continue the conversation, call a audible to talk about the sequestions ration. and why it's not happening on both sides. the panel continues after the break. ♪ [ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. this is the pursuit of perfection. by the armful? by the barrelful? e carful? how about...by the bowlful? campbell's soups give you nutrition, energy, and can help you keep a healthy weight.

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>> bret: we are back to continue talking about the sequester. overall the sequester is

$85 billion this year. we talk about $3.6 trillion budget. we are talk about the transfer authority. the former director talk about the ability of pentagon and other agencies to move money around. sequester says you have to take a haircut on all the different buckets as he put it. a percentage cut. you can't take your priority or move from one to another. that is a problem. if they had the ability to take the money from the conference fund and put it to personnel they could solve it easily. >> exactly. why are both sides resisting the effort? the president wants either new taxes or to tell the american people that he lost the fight to republicans because they blocked everything. they were happy to see the sky fall. republicans want they want to pocket the cuts.

as doug egan pointed out like to know where the money is going. that is another fight. when you real kate and you transfer authority where are things going. they also want the president to give in on form of medicare to go where real money is something that the president is not willing to do. i argue though they have done it twice, the republicans should make a bite at the a to put the legislation on the floor to reallocate funds to the same aunt of reduction but allow the defense department to transfer the money. >> bret: you think he doesn't want the, the president doesn't want the buckets to be transferred from place to place, as you look at our example of money transferred in buckets. because he wants the issue. he wants to hammer republicans on the issue.

>> with the solution simple and close at hand and easy to do. if he proposed it, it would be done and move the money. >> the fact he refuses it, he wasn't interested in the debt reduction in the fiscal cliff negotiations. we wanted a victory over republicans. he is not interested in the argument. he wants republicans to protect oil industry and take food out of the mouth of indigent children. that is the case he wants to make. the fact is if you look at this in terms of the amount it's a small amount of money we are talking about. last year the deficit was $1

$1.2 trillion. this is a fraction of a fraction of the deficit. >> bret: flip side, the republicans are not moving. they want entitlement reform. so they are using this as leverage point on that. >> they are making a different argument. making numbers based argument. there are problems with the republican party. the president is making an entirely political argument. his goal in my view is be the first second term president in our lifetime to have control of congress in the second half of second term. he is doing that by beating them in standoff after standoff. unreported fact how disspiritted the republican base is watching the leaders on the hill getting smacked around rate. they not uniting behind boehner and cantor in this. >> bret: we are spending 10, 15 minutes explaining it to the viewers but how many o

shows no do this? i argue none. >> i disagree. the public needs to know what is going on because this is historic betrayal of the taxpayer when the taxpayer counts on members of both parties to foster and further economic recovery. republicans are doing this for politics as much as the president. they will tell you this is a fight we can't back down on. this is all we can do. we will not give in. >> they hope it doesn't turn out so bad. >> they are doing it because it's the only hope of a dollar worth of cuts out of this administration. this is in law. obama will give you no cuts.

>> bret: the republicans could say transfer authority and take $85 billion and fight another day. that is it for the panel. stay tuned for nasa's reaction to last week's meteorite crash. [ lisa ] my name's lisa, and chantix helped me quit. i honestly loved smoking, and i honestly didn't think i would ever quit. [ male announcer ] along with support, chantix is proven to help people quit smoking. it reduces the urge to smoke. it put me at ease that you could smoke on the first week.

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